UNDP in Viet Nam

UNDP Report praises Viet Nam for Rapid Poverty Reduction

09 Jul 2003

Ha Noi – Viet Nam has achieved
impressive progress in poverty reduction and human development over
the last decade and is well on track to achieving the Millennium
Development Goals (MDGs), says the global Human Development Report
2003, the annual, independent report commissioned by UNDP and released
yesterday.

The Human Development Report introduces a new plan of action—the
Millennium Development Compact—to achieve the MDGs. The Goals, endorsed
by all members of the United Nations, set out a series of time-bound
and quantifiable targets ranging from halving extreme poverty to
halting the spread of HIV/AIDS by 2015.

Viet Nam's Human
Development Index (HDI) remains at 0.688, enabling Viet Nam to maintain
its medium development ranking of 109 out of 175 countries. Last year,
Viet Nam ranked 109 but out of 173 countries.

“Pakistan and Viet
Nam have similar incomes, but Viet Nam has done much more to translate
its income into human development”, notes the Report.

Viet Nam
has seen considerable rise since 1985 of its Human Development Index
(HDI), which measures achievements in key areas of human development,
such as standard of living, health and education. Viet Nam's HDI has
continued to steadily improve since the mid-1980s, from 0.583 in 1985
to 0.605 in 1990, 0.649 in 1995 and 0.688 more recently.

On the
basis of the HDR’s Human Poverty Index, which attempts to assess the
percentage of the population suffering from a variety of basic
deprivations and which ranks 94 developing countries for which adequate
data is available, Viet Nam ranks 39 out of 94 countries in this
year’s Report.

Viet Nam, thanks to key reforms, has made
remarkable progress across a broad range of socio-economic development
measures. The most impressive is the fall in the poverty rate from well
over 70% in the mid-1980s to around 29% of the population in 2002 -
one of the sharpest declines of any developing country on record.

Much
of this reduction can be traced to the high annual economic growth
rates of the country in the early 1990s (8-9%) and specifically to Viet
Nam’s strong agricultural performance since the late 1980s. Enacted in
2000, the Enterprise Law, which has created more than 60,000
businesses and 1.5 million jobs, has also significantly contributed to
reducing poverty by opening up the domestic private sector and off-farm
employment. This is an area that needs to growth further if Viet Nam
is to sustain the pace and balanced spread of economic development.

In
this regard, the Report argues that investment in industries and
businesses that create jobs, such as manufacturing and textiles, are
more important for human development than industries that require large
amounts of capital, such as oil exploration and production. The Report
also calls for special initiatives to support small businesses and
entrepreneurs in developing countries.

Kanni Wignaraja, UNDP
Resident Representative a.i. notes: “Just as the initial success of doi
moi was based on the liberalization of the non-state farm sector, the
next frontier appears to be the liberalization of the non-state
business sector.” Future success will likely be based on a further
liberalization of choices facing people in the non-state sector through
further policy, legal and institutional reform, while at the same time
reaching out to the remaining poor, often in the most isolated parts of
the country. “It is essential that national resources continue to be
focused on improving the health and education standards in the poorest
communes, with increased public investment in these sectors,” she says.

The
Report calls on developing country governments to prioritize spending
on the basic services that poor people need most: primary schools, not
only universities; rural clinics, not only technologically advanced
hospitals in big cities. “Poor countries cannot afford to wait until
they are wealthy before they invest in their people,” said Jeffrey
Sachs, Special Adviser to the UN Secretary-General on the Millennium
Development Goals, and a guest contributor to this year’s Human
Development Report.

UNDP research shows that future progress on
poverty reduction and achievement of other MDGs in Viet Nam will be
increasingly difficult to achieve due mainly to isolation of the
remaining poor -- not just geographic isolation, but also social
isolation, linguistic isolation, ethnic isolation and even isolation
from useful information.

According to Ms. Wignaraja, learning
from Viet Nam’s past successes provides valuable lessons for its future
development trajectory. She pointed to the early investments in human
capabilities, especially through broad-based literacy campaigns and
basic education programmes, which laid the foundation for the future
success of the doi moi reform process launched in 1986. These are no
less relevant today, but they must be combined with the specific
technical skills, management training and upgrading of rural education
and facilities, to ensure a well educated, healthy and entrepreneurial
rural population, that participates fully in the development decisions
that affect their lives.

Viet Nam: Achievements in selected Millennium Development Goals

Viet
Nam ranks 89th out of 144 countries in the Gender-related Development
Index (GDI) which is at 0.687, putting the country among the best
performers in the region. The GDI measures a nation’s achievement in
the same dimensions as the HDI, but is adjusted to account for gender
disparities. Viet Nam has the highest percentage of female political
participation in the region with 27.3% of parliamentary seats held by
women.

Viet Nam has progressed relatively quickly towards
eliminating hunger and the goal seems to be within reach. However the
ratio of undernourished people is higher for Viet Nam (18%) than the
regional average (10%).

Under 5 child mortality, Viet Nam’s progress (38/1000 life birth) is close to the regional average (43/1000).